Regional pattern of US unemployment

July 18, 2009

The US Bureau of Labour statistics has released its latest data on employment and unemployment by state. The variation across regions and by states is quite significant. California 11.6 %, Michigan, 15.2 %, Oregon 12.2 %, South Carolina, 12.1 %,North Carolina, 11.0 % Indiana 10.7% , Kentucky 10.9 %,Nevada 12.0 % Rhode Island 12.4 %Florida 10.4 % and D.C. 10.9 % and Ohio, 11.1 % have significantly   higher rates of unemployment than the national average of 9.5 %. In a number of these states the sharp drop in production in automotive and aeronautics manufacturing has hit hard. In Nevada the collapse in the casino and tourism trade is the likely vector.
States like North Dakota,4.2 %Wyoming, 5.9 % South Dakota,5.1 %   and Utah 5.7 % have much lower   rates. In fact, North Dakota a small largely rural state just south of my native province of Manitoba has the lowest rate of unemployment in the U.S. at 4.2 % . Not surprising perhaps since Manitoba and Saskatchewan have the lowest rates in Canada at 5.2 % and 4.6 % Neighbouring Alberta has   an unemployment rate of 6.8 %.The mid west prairies in both countries are doing relatively well thanks to natural resources, agriculture and diversifed service and small manufacturing. Neighbouring Minnesota which has unemployment above 8 % is not doing as well.

Clearly states heavily dependent upon auto manufacturing have been hit hardest.As has our manufacturing province, Ontario which has 9.6 % unemployment. California with 11.6 % unemployment has suffered one of the worst collapses in house prices and its aeronautic industry is also suffering.

So when the Federal government in both countries targets reducing the unemployment rate through economic stimulus it needs to keep in mind these regional variations to ensure the best return for tax dollars and direct the aid where it is most needed or where the possibility for employment growth is most likely. In the latter case migration of labour to where the jobs are and will be in the future becomes an important medium term factor.

At the same time because of the overall severity of the recession and its long duration comparable unemployment benefits should still be available no matter where people live, until unemployment rates drop substantially.